Intellidex 2020 reviews: 1nvest Swix 40

Catch this insight by Intellidex on the South African equity market. This note is on the 1nvest Swix 40 Index ETF. The 1nvest Swix 40 Index ETF tracks the JSE top 40 index using Swix weightings, which only considers
shares held on the South African registry. This ETF is ideal for passive investors with an appetite for risk and seeking exposure to a portfolio of the biggest JSElisted companies.

Intellidex insight:The 1nvest Swix 40 Index ETF tracks the JSE top 40 index using Swix weightings, which only considers shares held on the South African registry. This means that while the ETF selects constituents based on their market capitalisation, companies listed on other exchanges as well as the JSE are downweighted according to the proportion of the size of the foreign holdings. The higher the percentage held offshore, the lower its weighting in the ETF. This reduces exposure to mineral resources stocks – which suits the South African investor who is inherently exposed to that economic sector. Naspers and Prosus have abnormally high weighting in the index. This exposes investors to a significant capital loss should their share
prices dramatically drop.

The fund can be used as part of a core investment portfolio as it is both cost- and tax-efficient. The ETF is eligible for the taxfree investment accounts and only rebalances four times a year to reflect changes in the top 40, which keeps transaction costs low. Among the three JSE-listed Swix funds, 1nvest Swix ETF has the biggest assets under management and second-lowest total expense ratio (TER).

Fund description:The 1nvest Swix 40 ETF tracks the FTSE/JSE SWIX Top 40 Index which tracks the largest 40 companies listed on the JSE, ranked and weighted by market capitalisation on the South African register..

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1nvest Swix 40 ETF


Top holdings:The top 10 companies constitute 57.4% of the fund. The combines size of Naspers and Prosus diminishes the diversification benefits of the fund.

1nvest Swix Top 10 Holdings 2020

Suitability:This ETF is ideal for passive investors with an appetite for risk and seeking exposure to a portfolio of the biggest JSElisted companies. While equities are inherently riskier than other asset classes, especially over short periods, over long investment horizons they have historically performed better than inflation and other investment asset classes such as bonds and cash.

Historical performance:

1nvest Swix 40 Historical performance 2020

Source: and January 2020 fact sheet

Fundamentals:The fund derives its value from both local and economic activity. The South African economy has been ailing for some time and Covid-19 is adding salt to the country’s economic wounds. Both business and consumer confidence are at crisis levels. Due to the potential impact of Covid-19, we have significantly revised downwards our 2020 GDP growth forecast to a -2.3% from +0.1%. Similarly, global growth estimates are being revised downwards and early indications show this year will have the lowest growth since the slump of 2009, induced by the global financial crisis.

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1nvest Swix 40 ETF


Fund statistics:

1nvest Swix  40 fund Statistics 2020

Source: iress and January 2020 fact sheets

Alternatives: The fund’s closest peers are the Satrix Swix (TER: 0.44%) ETF and Sygnia, which has the lowest TER of 0.16%.

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1nvest Swix 40 ETF Fact Sheet

Swix 40 1nvest factsheet 2020

For more information around ETFs make sure to check out our new ETF site EasyETFs

Background: Exchange-traded funds (ETFs)

Exchange-traded funds (ETFs) are passively managed investment funds that track the performance of a basket of pre-determined assets. They are traded the same way as shares and the main difference is that whereas one share gives exposure to one company, an ETF gives exposure to numerous companies in a single transaction. ETFs can be traded through your broker in the same way as shares, say, on the Easy Equities platform. In addition, they qualify for the tax-free savings account, where both capital and income gains accumulate tax free.

Benefits of ETFs

  • Gain instant exposure to various underlying shares or bonds in one transaction
  • They diversify risk because a single ETF holds various shares
  • They are cost-effective
  • They are liquid – it is usually easy to find a buyer or seller and they trade just like shares
  • High transparency through daily published index constituents


This research report was issued by Intellidex (Pty) Ltd. Intellidex aims to deliver impartial and objective assessments of securities, companies or other subjects. This document is issued for information purposes only and is not an offer to purchase or sell investments or related financial instruments. Individuals should undertake their own analysis and/or seek professional advice based on their specific needs before purchasing or selling investments. The information contained in this report is based on sources that Intellidex believes to be reliable, but Intellidex makes no representations or warranties regarding the completeness, accuracy or reliability of any information, facts, estimates, forecasts or opinions contained in this document. The information, opinions, estimates, assumptions, target prices and forecasts could change at any time without prior notice. Intellidex is under no obligation to inform any recipient of this document of any such changes. Intellidex, its directors, officers, staff, agents or associates shall have no liability for any loss or damage of any nature arising from the use of this document. 


The opinions or recommendations contained in this report represent the true views of the analyst(s) responsible for preparing the report. The analyst’s remuneration is not affected by the opinions or recommendations contained in this report, although his/her remuneration may be affected by the overall quality of their research, feedback from clients and the financial performance of Intellidex (Pty) Ltd.

Intellidex staff may hold positions in financial instruments or derivatives thereof which are discussed in this document. Trades by staff are subject to Intellidex’s code of conduct which can be obtained by emailing mail@intellidex.coza.

Intellidex may also have, or be seeking to have, a consulting or other professional relationship with the companies mentioned in this report

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